Channing Wheeler, the controversial US head of the Department of Health’s commercial directorate has resigned less than a year into his contract for what he called “personal, family reasons”.

In a statement, Wheeler is reported as saying that, “the use of the independent sector in the NHS has helped to improve services for patients. The direction of travel on this is now inexorable and I am pleased to have helped the NHS to increase its commercial capability.”

A DH spokesman contacted by PharmaTimes News Online added: "Private sector companies and voluntary sector providers are providing NHS patients with access to high quality and faster treatment – as well as offering patients unprecedented choice about when and where they are treated. We remain committed to a diversity of providers in healthcare - this is practical reform in the interests of patients and the taxpayer not reform for the sake of it". The spokesman denied industry rumours that Wheeler had been pushed, re-emphasising his stated reasons.

Such good progress that a review is needed?
The statement quoted NHS chief executive David Nicholson’s praise for the progress Wheeler made in the past year in creating seven more independent sector treatment centres as part of the continuation of Wave Two of the ISTC scheme.

However, it made no mention that the vast majority of ISTC schemes planned for Wave Two were in fact scrapped, which will result in large payouts to the preferred providers involved in those contracts. A Freedom Of Information request by the Financial Times led to its discovery earlier this year that the DH suppressed evidence that axed programmes worth £750 million had earlier been showing “very good value for money”, according to an independent report.

Mr Nicholson said that the DH is “now going to review all our commercial capacity across the DH to identify how we can strengthen it, going forward.” If Mr Wheeler’s tenure had been a great success, the choice of a wide review is interesting.

Health Service Journal reported DH director general of commissioning and system management Mark Britnell saying in late 2007 that the 'commercial directorate will be reduced in size and regionalised and procurement will be localised'. However, HSJ also ran an interview with Wheeler earlier this month, in which he predicted that “natural evolution” of the commercial directorate would give it vital new roles in promoting the skills and rules of the NHS marketplace. The directorate's principles and rules for co-operation and competition were set out in an appendix to the NHS 2008-9 operating framework. Wheeler said that “the NHS didn't need the centre to do things for it, but for it to enable, facilitate, educate and to develop tools to implement world class commissioning and a rules-based system to help transform the NHS into a market."

The controversial directorate
Wheeler received a considerable pay and conditions package, which the Conservative opposition dubbed “an eye-watering deal”. He was paid £100,000 a year towards his accommodation costs, in addition to his salary package of £185,000, and was hired despite a controversial recent past employment in US managed care organisation United Health, where he had received backdated share options similar to those that led to its chairman William McGuire and two other senior directors resigning and reaching a £300 million settlement with the US financial regulatory Securities and Exchange Commission.

In 2007, it was found that just eight of the commercial directorate ‘s 190 staff are civil servants; the rest being external consultants, invoicing a total of £88,000-£120,000 a day.